US-India

The governments of the United States and India have been talking about negotiating a bilateral investment treaty for several years. The idea of a broader trade agreement between the two countries has often been mentioned as a longer term goal.

Bilateral relations between the two powers over the past decades have been complex. During the Cold War, India was non-aligned but friendly with Russia. Since 1991, India took a major turn by adopting neoliberalism as an economic frame for the country’s "development" strategy, and relations with the West subsequently thawed. Starting in 2005, India and the US signed a series of major bilateral cooperation agreements including the areas of defence, agriculture and food security, nuclear technology, energy, education, etc. Many of these initiatives met strong criticism at home in India as they frequently create conditions that benefit global capital and elites at the expense of local communities, especially in the rural areas.

In this process, since 2008, the governments of both countries also committed to signing a bilateral investment treaty, but this is taking some time. In 2014 and 2015, India reviewed its earlier "bilateral investment protection and promotion agreements" (BIPPAs) and decided to draw up a model "bilateral investment treaty" (BIT) to replace those BIPPAs. The Indian model BIT is still under debate but it departs from the US model BIT in several respects. Thus it could be a challenge to come to a common agreed text. But US business associations, which include many major TNCs among their members, are pushing hard to finalise a deal. Civil society organisations both in India and the US have been mobilising against the deal.

In parallel to this, India has been revising its policies on foreign direct investment, notably by opening up the country to foreign investment in multibrand retail (e.g. Walmart or Tesco), and on taxation.

US-India trade, in the meantime, has grown massively, with the US having a huge services trade deficit, much of which reflects the growth of outsourced US jobs to India.

American industry is keen that India and the US conclude their much-awaited Bilateral Investment Treaty (BIT), which it believes will strengthen India’s chances of membership in the Asia-Pacific Economic Cooperation bloc.

Médecins Sans Frontières/Doctors Without Borders (MSF) warned that US pressure for India to change its intellectual property policies could result in millions of people around the world losing their lifeline of affordable medicines.

The top members of US Congress and the Senate responsible for international trade issues urged the Obama administration to push for changes to India’s handling of intellectual property rights and technology

"With India now having concluded its own model bilateral investment treaty (BIT) framework, we are poised to be able to engage with the Indians and commence in negotiations on a bilateral investment treaty," the US Assistant Secretary of State for South and Central Asia said.

India and the US have reaffirmed commitment to the long-pending Bilateral Investment Treaty with PM Modi conveying to secretary of state John Kerry that New Delhi was prepared to hold early talks for the same.

On the occasion of the Prime Minister, Dr. Manmohan Singh’s visit to the USA, where he is supposed to discuss a Bilateral Investment Treaty between India and the US, the Forum against FTAs, a coalition of over 75 organisations, farmers groups, trade unions and development activists, calls upon the Prime Minister to review and rescind its decision to engage in this damaging treaty.

The India–US bilateral investment treaty negotiations have taken a hit after India insisted on preconditions that will, if implemented, deny foreign investors the right to international dispute settlement measures.

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